A Short History of Health Care: Let Doctors Be Doctors

Healthcare is an odd business in that it has always been both expensive and unpleasant. Until the 1920s, the average doctor couldn’t even help with the average ailment. While medicine then included a range of arts like phrenology, acupuncture, homeopathy and allopathy it really was a coin-toss whether you’d be saved or killed by a doctor’s work.

Then came insulin, sulfa, other “miracle” drugs and sterile fields that meant, for the first time, that healthcare actually worked more often than not. From there, doctors, scientists and medical engineers really took off; rapid advancements increased life expectancies and decreased suffering. And because of increasing effectiveness and supply, healthcare was even becoming cheaper in real cost-benefit terms. However, politicians had nothing at all to do with this, and that was apparently a problem. Teddy Roosevelt proposed a German-style, cradle-to-grave “socialized” healthcare system, but it was assailed as “the Prussian Menace” in those anti-German years before WWI, and Teddy’s scheme died. Even so, politicians wanting to seem compassionate started promoting socialized healthcare.

The July 1919 issue of the Insurance Monitor made this prescient assertion: "The opportunities for fraud upset all statistical calculations. . . . Health and sickness are vague terms open to endless construction. Death is clearly defined, but to say what shall constitute such loss of health as will justify insurance compensation is no easy task."

No matter. Between The Revenue Act of 1939’s health-related tax breaks, and 1943, when the War Labor Board excluded employer-paid health insurance from its wage freeze, American politicians charged into health care on their favorite horse, income tax.

In a nutshell, here’s what happened: Tax breaks for employer-paid health insurance meant that health insurance became a part of employment, and insurance became an integral part of healthcare. This inserted middlemen, which of course made everything more expensive. But who cared? The tax-subsidized, payroll-deducted cost was invisible enough that Americans started using insurance to pay for routine visits, dental checkups, eyeglasses and even plastic surgery. Group insurance offered large corporations better plans than small companies could muster, giving large corporations even greater advantages in hiring and competition than corporate laws already gave them. This also meant that the poor, or worse, the self employed, were even further distanced from the rich and incorporated in a very serious way. Obviously this created problems, but politicians never admit error, do they?

Four days before Tax Day, 1953, President Dwight Eisenhower established the U.S. Department of Health, Education and Welfare, giving government even more direct control over some of humanity’s most precious commodities. More political money and power meant more reasons for businesses to make campaign contributions and lobby. Of course, politicians at every level of government have used healthcare policy to reward their friends and punish their enemies. That’s their stock in trade.

Now tax money and policy is sifted and sorted through political appointees, immortal bureaucracies and defense-contract-style arrangements to feed a dwindling number of profit-starved insurance companies who then deny your claim. Doctors hire legions of workers to manage the regulatory, litigative, and insurance paperwork hassles; or leave private practice to become an employee within a clerically staffed healthcare corporation. So healthcare is still both expensive and unpleasant. But now it’s only because politicians, not doctors, are practicing medicine. Our healthcare injustices and vital statistics have decayed into an embarrassment at just the time when technology should make healthcare cheap, effective and available to all.

It is hard to imagine what politicians could have done to make our healthcare situation any worse. Yet, according to a July 2006 Harris Poll, Americans rate the issue of healthcare well-behind Iraq, the economy, immigration and even gas prices. Even more strangely, most people now think we must, to some degree and by some unspecified method, “socialize” healthcare just as Europe, Canada and other nations are now scrambling back toward free market reforms. What are we thinking?

Let politicians have their way with Iraq, the Colts and toll roads. Let them run lotteries and practice voodoo. But please, let doctors do healthcare at last; they’ve earned the right.

Andrew Horning, an adjunct scholar of the Indiana Policy Review Foundation, lives in Freedom, Ind., and works in the health industry. He was a candidate for the U.S. House of Representatives in 2004. Contact him at ahorning@inpolicy.org.

Join Our Mailing List

Subscribe to Blog via Email

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 40 other subscribers

Email Address

Our mission is to marshal the best thought on governmental, economic and educational issues at the state and municipal levels. We seek to accomplish this in ways that:

Exalt the truths of the Declaration of Independence, especially as they apply to the interrelated freedoms of religion, property and speech.

Emphasize the primacy of the individual in addressing public concerns.

Recognize that equality of opportunity is sacrificed in pursuit of equality of results.

The Indiana Policy Review Foundation is a non-profit education foundation focused on state and municipal issues. It is free of outside control by any individual, organization or group. It exists solely to conduct and distribute research on Indiana issues. Nothing written here is to be construed as reflecting the views of the Indiana Policy Review Foundation or as an attempt to aid or hinder the passage of any bill before the legislature or to further any political campaign.

The foundation's white papers are intended to make scholarly research on Indiana issues more widely available to policy analysts and researchers. White Papers represent research in progress and are published to invite comment and discussion as preparation for their submission to academic journals and other professional publications. The authors are solely responsible for the content of their research and analysis.